Medical emergencies, educational needs, a sudden calamity, house repair, or even a marriage at home – any of these things can knock unexpectedly. And there, the first solution that hits our minds is to take a personal loan.
However, getting it approved is something that gives us sweats and blisters. Especially in India, personal loan instant approval is not an easy task. But, if you do the right things, the breeze can favour you well.
Here are a few financial tips that can instantly improve the chances of your personal loan approval:
7 Smart Steps to Follow Get Instant Personal Loans Approval in India
1. Excel at Your Credit Score
A credit score is your image in the financial world. The poorer it is, the less financial institutions will trust you. So, what is a healthy credit score?
Generally, a credit score above 750 will put you in an excellent and trustable position. It will tell them that you have the ability to repay what you take and that you won’t run away. Doing these things can improve your credit score with time:
- Don’t take huge debt at one point in time
- Opt for a longer loan-repayment tenure
- Set reminders for timely payments of your taken credit
- Keep a lengthy credit history by maintaining older credit cards
- Keep a healthy credit mix with both secured and unsecured loans for both short and long-tenure
Sometimes, there also remain errors in the credit score. You might surely want to recheck that on a timely basis and rectify it accordingly.
2. Maintain Job Stability
Every financial institution is interested in your flow of income more than you are in it. It ensures that your account is receiving a regular flow of money. This simply vouches for your ability to repay the loan amount. So, what to do? A steady job history and regular income are what you need.
But what if you are self-employed? Instant loan for self-employed also demands the same thing – a stable business and income. The business must be profitable. Its balance sheet must look promising.
3. Have a Nice Debt-to-Income Ratio
Debt-to-income ratio talks about how much debt there has been against your income. Taking monthly debts that exceed 40% of your income means you are overdoing it. It will hurt your loan approval.
So, always keep this ratio in a healthy range. Also, if you already have a bad ratio, try to repay your debts as soon as you can. If there are any pending credit card payments, deal with them at the earliest before applying for the loan.
4. Don’t Make Multiple Applications
You might feel that applying for multiple loans can increase your chances of personal loan instant approval. However, it is otherwise. Applying for multiple loans simultaneously negatively impacts your credit score. What you need to do is to apply for one at a time.
5. Do the Documentation Rightly
Sometimes, missing a document here and there can delay the whole loan approval process. You would not want these silly things to waste your precious time when each day is important. So, always file the loan application with all the documents required. Here are the documents that you will need:
- Proof of identity – Aadhaar, Passport, Driver’s license, Birth Certificate, etc.
- KYC – PAN, Passport, Voter’s ID, Aadhaar, etc.
- Address proof
- Income proof – last 3 month’s salary slips
- Last 3 month’s bank statement
- Proof of employment – Employee ID card
Always confirm all the documents that you need with the respective financial institution first. Inaccurate or incomplete documentation will only lead to delays or rejections.
6. Apply for the Right Loan Amount
Financial institutions decide the loan to be approved based on certain criteria such as:
- Income status
- Credit score
- Existing debts
- Past payment records, etc.
If you apply for a loan amount larger than what you are eligible for, you will not get it approved. You can check your loan eligibility from this simple calculator.
7. Be Eligible for the Loan
To apply for a personal loan, there are a few criteria that must be fulfilled beforehand. Here are the perquisites that must be fulfilled:
- Age must be 21-60 years
- Minimum ₹25,000 monthly income for people from Delhi and Mumbai, ₹20,000 for people outside these cities
- A minimum CIBIL score of 750
- Loan EMI below 60% of their income
All these rules and guidelines regarding loan eligibility keep on changing. You must always be updated with the present market to avoid any confusion and slow down your loan approval.
Conclusion
Personal loan instant approval is a pleasing thing. However, it is a tough landscape to excel at. No matter whether you are applying for an instant loan for self employed or salaried individuals, you need to have a healthy credit score above 750. Once it is there, the chances of instant loan approval increase.
Apart from that, take care of the job and business stability, debt-to-income ratio, and payment history. Just make sure you do not lose all this hard work due to wrong documentation.
Many lenders offer online application processes that are faster and more convenient. It is less paperwork and provides pace to the whole process. All you need is the right approach and the right mindset. Research properly and make sure you make informed decisions to secure the best possible loan terms.
